On August 1, 2012, Renfro Co

question 41

Multiple Choice

On August 1, 2012, Renfro Co.purchased to hold for collection, 1,000, $1,000, 9% bonds for $940,000 (a 10% effective interest rate) .The bonds, which mature on August 1, 2022, pay interest semiannually on February 1 and August 1.Renfro uses the effective interest method of amortization.The bonds should be reported in the December 31, 2012 statement of financial position at a carrying value of

• A)$943,333.
• B)$941,667.
• C)$940,000.
• D)$942,000.

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